LedgerX Raplaces Troubles Silvergate With Signature Bank (Report)

LedgerX Raplaces Troubles Silvergate With Signature Bank (Report)

LedgerX – cryptocurrency derivatives exchange and a subsidiary of collapsed giant FTX – will reportedly end its partnership with Silvergate Bank.

It encouraged users to receive transfers through New York-based Signature Bank.

Switch to another partner

According to reporting by Bloomberg, LedgerX differed from the embattled financial institution focused on cryptocurrencies – Silvergate Bank. It advised customers to stop using it to receive domestic remittances from March 1.

LedgerX will double down on its existing partnership with Signature Bank and tell customers to use the latter for such services.

Signature Bank said it would reduce, but not completely eliminate, its exposure to the cryptocurrency industry by the end of 2022. ItstoppedConducted fiat-to-crypto transactions worth less than $100,000 for Binance earlier this year.

“Although we cannot comment on specific customers, we are still in the digital asset deposit business,” Signature Bank said in reference to the collaboration with LedgerX.

LedgerX is one of the few surviving companies under the umbrella of the bankrupt giant FTX. It received approval from the US Commodity Futures Trading Commission and was purchased by FTX US in October 2021. LedgerX even attempted to register with the CFTC, but withdrew its intentions shortly after the idea was relegated from SBF.

The exchange has attracted the attention of several industry players that could be interested in acquiring it, including Gemini and Blockchain.com. Initial bids were due on January 25th, while the final auction is scheduled for March 7th.

Silvergate problems

The hectic end of 2022, highlighted by the FTX bankruptcy in November,Triggereda massive $1 billion loss for Silvergate Capital (the parent company of Silvergate Bank) in Q4. There was also a decline in cryptocurrency customers: from 1,677 on September 30, 2022 to 1,620 at the end of December. Another major factor responsible for Silvergate's problems was BlockFi's $20 million commitment.

The crypto-related bank started the year on the wrong foot,Burnaround 40% of the workforce and the abandonment of several projects.

Also US Senators Elizabeth Warren, Roger Marshall and John KennedyallegedlySilvergate to have insider knowledge about the alleged FTX fraud.

“Both Congress and the public need and deserve the necessary information to understand Silvergate’s role in FTX’s fraudulent collapse, especially given that Silvergate turned to the Federal Home Loan Bank as the lender of last resort in 2022,” the politicians said at the time.

Featured image courtesy of Crain’s New York Business

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